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New dental package announced—but it’s not Denticare

Posted 29/08/2012 by Amanda Biggs

Today the Health Minister, Tanya Plibersek, announced a new dental package worth $4 billion over six years. The government will provide Medicare funded dental services to children and an expanded public dental service for low income adults and those in rural and regional areas, as well as an additional investment in dental infrastructure and workforce.

From January 2014, children aged 2 to 17 will be entitled to up to $1000 for ‘basic’ dental work over a 2 year period from a dentist of their choice on presentation of their Medicare card. Services funded will reportedly include a dental check-up, scale and clean, fissure sealants, and basic restorative work including fillings, but not more complex work such as orthodontics or crowns. The government estimates some 3.4 million children will be eligible.

The new child entitlement, costing $2.7 billion, will replace the Teen Dental Scheme (which subsidises an annual check-up for teenagers) and will be similarly targeted to families eligible for Family Tax Benefit A and other welfare entitlements.

From July 2014, an additional $1.3 billion will be directed towards state-run public dental programs to deliver services to those on low incomes and in outer metropolitan, rural and regional areas. States will be required to maintain their existing level of dental funding. Some $225 million will also be invested in infrastructure and dental workforce. This is in addition to the $515 million in extra funding announced in the last budget.

In order to fund the program, savings will be drawn from other areas of government expenditure. The controversial Chronic Disease Dental Scheme (CDDS)—targeted to those with chronic conditions and having cost more than $2.3 billion—will cease from 30 November 2012.

There will be a lag time between the closure of the CDDS and the commencement of the children’s entitlement and the expanded funding for public dental care.

Closure of CDDS will not require legislation but will require an administrative order which can be disallowed by the Parliament. The Health Minister indicated at her press conference that savings from the closure of the CDDS would not count towards funding the new scheme, as its closure has been factored already into the forward estimates. The Greens, who have previously opposed the closure of the CDDS, broadly support the new dental package including the closure of the CDDS. This means the government has secured the Parliamentary support it needs to close the CDDS, which it has long sought to close, following cost overruns, allegations of over-servicing and rorting, and administrative problems (as detailed in this previous Flagpost).

The Health Minister described the scheme today as a ‘bedrock’ scheme, which can be built on and expanded in the future. Full funding details will be released in the Mid-Year Economic and Fiscal Outlook.

Legislation to establish the new entitlement scheme will be introduced in the next sitting period.

A number of issues were not fully addressed in today’s announcement. These include what happens to those patients with chronic conditions with the closure of the CDDS, who may not be eligible for the expanded public dental services. Agreement with the states and territories over who and what will be funded through their public dental services must also be reached.

Under the new child entitlement scheme families may also face some out of pocket costs where the dentist charges a higher fee than is rebatable through Medicare. Whether private health insurance will be able to help fund this gap remains unclear. Another key issue will be ensuring the cooperation of dentists to keep their fees reasonable, given many were dissatisfied with how the government dealt with the administrative problems they encountered when providing services through the CDDS (and which were detailed to this Senate committee).

The capacity of the existing dental workforce to meet demand once the programs commence is also unclear. Although some funding has been provided to address workforce issues, and recent budgets have also increased funding for the dental workforce, there remain problems with the distribution of dentists. The majority continue to practice in urban areas, meaning that families in rural, regional and outer metropolitan areas may find it more difficult to redeem the entitlement or face higher out of pocket costs, compared to families in metropolitan areas, where dentists are more plentiful.

The Health Minister was also unable to detail where the money to fund the new scheme would be drawn from. Given the government remains committed to a small budget surplus it is likely to have to rely on savings from other government programs, unless there is an improvement in government revenues. Finally, while many will applaud the additional investment in a long-overlooked area of Australian health, others may be concerned this new package continues a trend of moving away from the universal principle that underpins Medicare. Public support for Medicare which remains funded through general taxation and a Medicare levy relies at least in part on its universal eligibility entitlement. Eroding this entitlement significantly over time could risk ongoing support.